Sept 17 (Reuters) - The trial where U.S. anti-trust
regulators made their case to block Kroger's ( KR ) $25 billion
bid to buy rival grocer Albertsons ( ACI ) will conclude on
Tuesday, but the deal's legal challenges have just begun, with
two more trials this month to hear complaints the merger could
jack up grocery bills.
For the past three weeks, the U.S. Federal Trade Commission
and a coalition of states have sought to prove at trial in
Portland, Oregon, that the deal would harm shoppers and
unionized grocery workers.
By the time that case concludes on Tuesday, the companies
will be on day two of another trial in Seattle where Washington
state's attorney general is challenging the deal. Beginning on
Sept. 30, a judge in Denver will hear Colorado's arguments for
stopping the deal.
"It's a notable increase in the cost, stretches out the
timeline, and is an unwelcome additional collection of
obstacles" for the companies, said William Kovacic, an antitrust
professor at George Washington University.
Kroger ( KR ) and Albertsons ( ACI ) have spent $864 million in merger
costs this year, and they oppose all three cases. Kroger ( KR ) says
the merger will result in lower prices and higher wages.
"Only global, non-unionized giants like Walmart ( WMT ), Amazon ( AMZN ) and
Costco will benefit from this deal being blocked," the company
said in a statement.
In Washington state, where Attorney General Bob Ferguson
went to trial to block the deal on Monday, half of all grocery
sales flow through one of the two chains, and 124 stores are
slated to shift to C&S if the merger proceeds.
In addition to arguing the deal will raise prices and
diminish choices for shoppers, Ferguson has argued it will make
it easier for Kroger ( KR ) to close stores where workers are unionized
and reopen them as non-union.
"We look forward to standing up for Washingtonians in
Washington state court," Ferguson said in a statement.
Colorado, too, has sued to block the merger over concerns
from shoppers, workers and local farmers who supply both chains.
"Colorado cares about having local food. And that is an area
where these two companies compete against each other. It's
important to farmers," Attorney General Phil Weiser said in a
recent interview.
At the Oregon trial that began on Aug. 26, the FTC and a
coalition of eight states plus Washington, D.C. called grocery
executives, union leaders and economists as witnesses to try to
show the deal is likely to drive up prices and diminish workers'
bargaining power by eliminating head-to-head competition between
the two chains.
The two grocers sought to show the deal was necessary to
lower prices at Albertsons ( ACI ) stores and enable both chains to
compete with Walmart ( WMT ).
Kroger ( KR ) has said no stores will be closed as a result of the
merger. But that would not prevent stores being closed or
consolidated down the road.